In yesterday’s post on the price of gold and its direct relation to collateralized liquidity I linked the shortage of collateral to QE. For the sake of space I omitted the demand for liquidity part of the equation. This post aims to fill in that variable, particularly in the context of the gold price shamble. .. read more
…does not always equal causation, but sometimes the data fits the inference.
Late Friday the Treasury Department released its semi-annual report on global exchange rates or as I like to call it, the semi-annual report on why all other countries on planet earth should let their currencies rise against the UD Dollar. Or maybe the semi-annual report on how easy monetary policy by other countries’ central banks .. read more
Getting into the arcane accounting of central banks is a chore, but, in an uncertain world with every central bank “doing something” at exactly the same time, it is a vital task that requires patience. A lot of patience. Central banks all have familiar financial disclosures and statements. The Fed, ECB, SNB, Bank of England, .. read more
Japan last week announced a radical plan to finally slay the deflation dragon that has stalked their economy for the last 25 years. The sheer magnitude of the BOJ’s program should put to rest once and for all whether monetary policy can truly work as the growth tonic that policy wonks such as Ben Bernanke .. read more
In the bank meltdown of 2011, the financial sector was in obvious and blatant distress much to the obvious and blatant consternation of every central banker in the modern economic “community”. By September 2011, the US Federal Reserve re-opened (a second time) dollar swaps with the ECB to pass US $ funding on to local .. read more
You’ve probably read about financial repression in which governments or their agents interfere in the market in an effort to reduce debt. The most obvious recent example is the Fed and other central banks interfering in bond markets and suppressing interest rates. While these central banks generally justify this act on the grounds that it .. read more
The 21st century, global, economic saga continues to provide plenty of nuance. The past few weeks, we’ve been introduced to a few new characters, Cyprus and Russia. There is a bit of a rogue element with Russia. Regardless, the same common themes are present for analysis: leverage, speculation, global capital imbalances and the accompanying political, .. read more